Senator Cruz: keep income tax, lower top rates.

[johnwk]

BTW, my personal view of the tax on carriages is that it was unconstitutional as it was assessed directly upon the tax payer's property, which is far different from laying an excise tax on the manufacture of a product or product sold.

JWK

 

[Sonny Tufts]

Seems that Sonny is not familiar with the intentions for which the 16th Amendment was adopted, nor what the Victory Tax of 1942 was intended by deception to accomplish.

I am, but you are not.

In 1913 the leadership of the progressive movement convinced the working person [that’s your ordinary working person] to get behind the 16th Amendment. It was sold to the working person as a means to get those greedy corporations to pay their “fair share” in taxes.

A tax on corporations measured by income had already been enacted in 1909, and its constitutionality had been upheld by the Supreme Court in 1911, so the 16th wasn't needed for this purpose. The real aim of the 16th was to tax investment income.

Pay-for-work was taxed from the very first tax act in 1861. Read it here and learn something

Sec. 49. And be it further enacted, That on and after the first day of January next, there shall be levied, collected, and paid upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment or vocation carried on in the United States or elsewhere, or from any other source whatever, if such annual income exceeds the sum of eight hundred dollars, a tax of three percentum on the amount of such excess over eight hundred dollars... http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=340

The following year the statute was modified by lowering the exemption and mentioning salaries by name:

Section 90. And be it further enacted, That there shall be levied, collected, and paid annually upon the annual gains, profits, or income of every person residing in the United States, whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever, except as hereinafter mentioned, if such annual gains, profits, or income exceed the sum of six hundred dollars and do not exceed the sum of ten thousand dollars, a duty of three percentum…
http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=504

 

[Weston White]

1. Day laborers do not normally acquire gains or profits, which is to emphasize ‘incomes’, (i.e., “annual gains, profits, or income”).

2. The context of business, professional activities, and privilege within the statute (And further expanded up within Section 91—requiring the tax to be deducted from employees of the federal government and from activities associated from certain other privileged businesses such as banks, insurance, railroads, steam and ferry boats, etc.) is clearly enumerated (i.e., it states “whether derived from” and not simply “whether from”—this overlook was addressed at length within the Eisner case): “whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever”.

3. Day-laborers do not earn “salaries”; usually that entitlement is reserved only to officers and the like—wages are not synonymous to salaries.

4. In 1862, good day-labors were paid up to $1 a day, while average day-laborers earned up to $16 a month; and each worked between 8-months and 1-year. So presuming the both worked the entire year, without a single day off (which being a Christian nation would have always taken Sunday off) that puts their wages at between $192 and $365 per annum—clearly the intent of the Legislature’s $600 threshold was to entirely exclude day-laborers in all respects.

 

[Sonny Tufts]

1. Day laborers do not normally acquire gains or profits, which is to emphasize ‘incomes’, (i.e., “annual gains, profits, or income”).

Of course they do, just as a $10 million/year executive does.

The context of business, professional activities, and privilege within the statute (And further expanded up within Section 91—requiring the tax to be deducted from employees of the federal government and from activities associated from certain other privileged businesses such as banks, insurance, railroads, steam and ferry boats, etc.) is clearly enumerated (i.e., it states “whether derived from” and not simply “whether from”—this overlook was addressed at length within the Eisner case): “whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever”.

As usual, your command of English hasn't imporoved one bit, but it seems you are trying to argue that (a) only income from "privileged" occupations or businesses was covered, and (b) only income derived from rents, interest, etc. was covered. Both of these arguments are absurd. First of all, the statute isn't limited to privileged activities, which should be made perferctly clear by the phrase "from any other source whatever". Second, if only income derived from salaries is taxable, it follows that only income derived from interest, dividends, and other investment income is taxable but not the investment income itself, which is preposterous.

In 1862, good day-labors were paid up to $1 a day, while average day-laborers earned up to $16 a month; and each worked between 8-months and 1-year. So presuming the both worked the entire year, without a single day off (which being a Christian nation would have always taken Sunday off) that puts their wages at between $192 and $365 per annum—clearly the intent of the Legislature’s $600 threshold was to entirely exclude day-laborers in all respects.

Indeed. The exemption amount was purely an arbitrary number selected by Congress. It cound have set the exemption at $1 if it had wished to, since there is no constitutional requirement that any minimum amount of income be exempt from taxation. The point is that pay-for-work, in whatever amount, may be constitutionally reached by an unapportioned tax.

 

[Weston White]

1. In general, day-labors through their right to privately contract earn only their competency (i.e., a livelihood) in a fair exchange of their sacrificing their time, energy, and efforts—meanwhile providing greater benefit to their employer and society in general. There is, for most laborers, no gain or profit involved, while for others there is, such as paid sick or vacation time, annual bonuses, etc.

2. If Sonny is advocating that the principal (i.e., corpus) of an investment is taxable without apportionment along with its gain, he would be incorrect.

3a. lolol at: “As usual, your command of English hasn't imporoved one bit”.

3b. Sonny is again confabulating the purposed context. The operation of a business, occupation, trade, vocation, etc., is a privilege unto itself—it is not merely a matter of the businesses, occupations, trades, or vocations being decreed as “privileges”; viz., one does not possess a birthright necessity or individual right to operate the above stated manmade privileges. Although, for example, the Internal Revenue Code specifically does address certain activities or classifications of employment, such as: railroads; government employment, seamen, and military; insurance, sales, and stock companies; alcohol, firearm, and explosive manufacturing; non-citizen employments; etc.

3c. To realize the context Sonny seeks to be a reality, the Legislature would have been obliged to greatly simplify the statute, crafting it similarly to state the following:

“That there shall be levied, collected, and paid annually upon the annual income of every person residing in the United States, from any source whatever, except as hereinafter mentioned…”

At last, clearly this was not the case and if it would have been, it would of caused public outrage like never before realized; and would have certainly never, ever made it through ratification.

3d. The inclusion of the phrase “from any other source whatever” is intended as a catch-all and is to be taken in context to its included enumerations, not to override them. Two elements are to be required, (1) one or more constitutionally taxable sources (e.g., monetary principal or capital) from which is to be (2) derived a gain or profit (e.g., monetary excess or wealth), serving as the ‘gross income’. Merely including legal verbiage in the form of “from anything whatsoever” does not as a consequence empower the Legislature to bypass constitutional constraint.

4. I am asserting that unless specifically excluded within the Internal Revenue Code, all bona fide gains and profits—which are part and parcel to the popular phrasing of ‘income’—are constitutionally taxable without apportionment and without exigent circumstances being presented. Very simply stated, ‘income’ means the excess above whatever capitalistic source that has come-in within a given tax-period.

5. Not exactly, because in this instance it entirely changes the disposition of the act, from one of an indirect tax that was marketed as being only upon excess, to one of becoming a direct tax upon absolute necessity.

 

[johnwk]

Originally Posted by johnwk
Seems that Sonny is not familiar with the intentions for which the 16th Amendment was adopted, nor what the Victory Tax of 1942 was intended by deception to accomplish.

I am, but you are not.

I suggest you go to POST NO. 39 which is titled “The 16th Amendment and Victory Tax of 1942” and learn before you make an insulting remark to me.

Pay-for-work was taxed from the very first tax act in 1861. Read it here and learn something

Sec. 49. And be it further enacted, That on and after the first day of January next, there shall be levied, collected, and paid upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment or vocation carried on in the United States or elsewhere, or from any other source whatever, if such annual income exceeds the sum of eight hundred dollars, a tax of three percentum on the amount of such excess over eight hundred dollars... http://memory.loc.gov/cgi-bin/ampage....db&recNum=340

You are a bit presumptuous my friend. I have gone over those statutes many years ago [back in the early 1980s] and have referenced both many, many times in various forums. Additionally, having studied them very carefully, which you apparently have not, I found nothing in either about “pay-for-work” or “earned wages” being taxed. In fact, the tax was imposed upon “income” which a business owner may realize who hires employees for a particular profession, trade, employment or vocation and realized a profit or gain, collectively referred to as “income” which was then taxed. But the average wage earner at that time period was lucky to earn $10.00 for a 60 hour week and the tax in question did not apply to them! I cannot imagine an ordinary wage earner earning $800 a year at that time period which was the threshold for the tax. Nor can I imagine earned wages being considered, for tax purposes, "income".


JWK

 

[seraphson]

IMO eliminate property and income tax and adjust budgets to accommodate said changes.

 

[Sonny Tufts]

Nor can I imagine earned wages being considered, for tax purposes, "income".

Then your imagination is confined to the tax protester mythology. The claim that wages do not constitute income is one of the most consistently and uniformly rejected frivolous arguments there is, so much so that people who continue to make it are fined by the courts for wasting their time with such rubbish.

And did you overlook the term "salaries" in the 1862 Act? Or do you, like Mr. White, claim that an executive's pay is income but a hourly worker's pay isn't?

 

[johnwk]

Originally Posted by johnwk

Nor can I imagine earned wages being considered, for tax purposes, "income".

Then your imagination is confined to the tax protester mythology. The claim that wages do not constitute income is one of the most consistently and uniformly rejected frivolous arguments there is, so much so that people who continue to make it are fined by the courts for wasting their time with such rubbish.

And did you overlook the term "salaries" in the 1862 Act? Or do you, like Mr. White, claim that an executive's pay is income but a hourly worker's pay isn't?

So now, instead of having an intelligent discussion you find it necessary to launch a personal attack and name calling?

In reference to the definition of “income” I rely upon the sound reasoning stated in In EISNER v. MACOMBER , 252 U.S. 189 (1920) the SCOTUS gave the characteristics defining “income” as follows:

After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, 247 U.S. 183, 185 , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054).
Brief as it is, it indicates the characteristic and distinguishing attribute of income essential for a correct solution of the present controversy.

So, we now learn that all money that comes in is not “income” within the meaning of the 16th Amendment, but only that portion which represents a “profit” or “gain” And, “profits“ or “gains, are calculated by deducting all necessary expenses and outlay from gross receipts …the remaining portion being “profits” and or “gain“!

It should also be noted that the income from a business which is wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to income tax in that case.

And, in Sullenger vs. Commissioner, the Court allowed the business owner [who made illegal purchases of meat] to deduct the cost of meat purchased at a higher price then set by the Office of Price Administration, a World War II price control agency, which he then resold for profit. The “income” from those sales was being taxed which was at issue in the case. The Court went on to cite Sullivan and concluded:

“No authority has been cited for denying to this taxpayer the cost of goods sold in computing his profit, which profit alone is gross income for income tax purposes.”

The point being, even crooks engaged in illegal activities may deduct their outlays and expenses in computing a “profit” which is then taxed as “income”. But the way things are today, working people get shafted and are not allowed to deduct their necessary expenses and outlays such as transportation to and from work, the cost of food which fuels their body during working hours, the cost of medical expenses which are essential to health so they may work and provide their labor, nor is there a calculation for working people to deduct the most important outlay they make in pursuit of earning a wage___ eight hours of their lives each day which they invest and make available to their employer, the value of which the employer deducts from gross receipts and not the employee who has invested the outlay of their labor in pursuit of a wage.

And what did one our founding fathers think about taxing a working person’s wage?


“…..with all these blessings, what more is necessary to make us a happy and a prosperous people? Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities“._____ Thomas Jefferson, First Inaugural Address


Finally, what you forgot was the average wage earner at that time period was lucky to earn $10.00 for a 60 hour week and the tax in question did not apply to them! I cannot imagine an ordinary wage earner earning $800 a year at that time period which was the threshold for the tax. Nor can I imagine earned wages being considered, for tax purposes as being "income".


JWK


If the provisions of the constitution can be set aside by an act of congress, where is the course of usurpation to end? The present assault upon capital is but the beginning. It will be but the stepping-stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich,-a war constantly growing in intensity and bitterness. 'If the court sanctions the power of discriminating taxation, and nullifies the uniformity mandate of the constitution,' as said by one who has been all his life a student of our institutions, 'it will mark the hour when the sure decadence of our present government will commence.' , Pollock v. Farmers' Loan & Trust Company, (1895)

 

[Weston White]

Then your imagination is confined to the tax protester mythology. The claim that wages do not constitute income is one of the most consistently and uniformly rejected frivolous arguments there is, so much so that people who continue to make it are fined by the courts for wasting their time with such rubbish.

And did you overlook the term "salaries" in the 1862 Act? Or do you, like Mr. White, claim that an executive's pay is income but a hourly worker's pay isn't?

Ah, so there is where that kettle hath gone.

Executives are corporate officers, laborers are not; executives enjoy six or more figures, laborers earn only a fraction of that; laborers actually toil for their remuneration, executives either do not or otherwise minutely toil; executives are provided a host of benefits and options, laborers either are not or their benefits are greatly limited by comparison.

However, in general a salary (which is not as clear cut an issue as wages) is only appropriately taxable as income when itself is associated with a gain or profit, e.g., being provided popular stock options, $20,000 annual good performance bonus, or a 4-week paid vacation, as part of their salary package.

Regardless, the intention is crystalizing, 'salaries' were enumerated, while 'wages' were omitted.

 

[Sonny Tufts]

In reference to the definition of “income” I rely upon the sound reasoning stated in In EISNER v. MACOMBER , 252 U.S. 189 (1920) the SCOTUS gave the characteristics defining “income”

SCOTUS has confined Macomber to its facts and has declined to use it as a litmus test for determining what income is:

Nor can we accept respondent's contention that a narrower reading of 22 (a) [the 1939 Code's version of the current Section 61(a)] is required by the Court's characterization of income in Eisner v. Macomber, 252 U.S. 189, 207 , as "the gain derived from capital, from labor, or from both combined." 6 The Court was there endeavoring to determine whether the distribution of a corporate stock dividend constituted a realized gain to the shareholder, or changed "only the form, not the essence," of his capital investment. Id., at 210. It was held that the taxpayer had "received nothing out of the company's assets for his separate use and benefit." Id., at 211. The distribution, therefore, was held not a taxable event. In that context - distinguishing gain from capital - the definition served a useful purpose. But it was not meant to provide a touchstone to all future gross income questions. Helvering v. Bruun, supra, at 468-469; United States v. Kirby Lumber Co., supra, at 3. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430 (1955)

The point being, even crooks engaged in illegal activities may deduct their outlays and expenses in computing a “profit” which is then taxed as “income”.

Not quite. Drug dealers, for example, may not deduct their business expenses, although they may deduct their cost of goods sold. See Section 280E.

But the way things are today, working people get shafted and are not allowed to deduct their necessary expenses and outlays such as transportation to and from work, the cost of food which fuels their body during working hours, the cost of medical expenses which are essential to health so they may work and provide their labor, nor is there a calculation for working people to deduct the most important outlay they make in pursuit of earning a wage___ eight hours of their lives each day which they invest and make available to their employer, the value of which the employer deducts from gross receipts and not the employee who has invested the outlay of their labor in pursuit of a wage.

That's because personal living expenses aren't deductible per Section 262. Here's how one court addressed your concerns:

Petitioners do not argue that the various expenditures at issue in this case are without the scope of section 262 or that respondent has improperly calculated the amount of self-employment tax in accordance with sections 1401 and 1402. Rather, their principal argument is that Congress, by denying deductions for personal, living, and family expenses in the computation of taxable income, has exceeded its authority under the Sixteenth Amendment to the Constitution to lay and collect taxes on "incomes." The cornerstone of petitioners' argument is the definition of income stated by the Supreme Court in Eisner v. Macomber, 252 U.S. 189, 207 (1920), as "the gain derived from capital, from labor, or from both combined." They argue that the "gain" from labor cannot be determined until the "cost of doing labor," i.e., their expenditures at issue, has been subtracted from the amount received from the sale of labor. Petitioners attempt to support their method of arriving at the figure reflecting "income" which may constitutionally be taxed by analogizing the "living expenses" of one who depends upon the sale of his services for his livelihood to the "cost of goods sold" concept in certain business contexts. See Sullenger v. Commissioner, 11 T.C. 1076 (1948); Anderson Oldsmobile, Inc. v. Hofferbert, 102 F. Supp. 902 (D.C. Md. 1952), affd. 197 F.2d 504 (4th Cir. 1952). Appeal is made to history and philosophy and to analysis of legal, social, and economic concepts, none of which leads, however, to the result they seek.

It is difficult, if not impossible, to respond to arguments such as petitioners have put forth without becoming embroiled in a game of semantics. The logical force requiring rejection of their arguments -- apart from their assertions of personal political philosophy which do not provide a basis for us, a Court sitting to interpret the law, to decide the questions dispositive of this case -- is essentially a matter of the definition of terms. Thus, should we hold that "gain" is an essential element of income, compare Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), affd., revd., and remanded 439 F.2d 934 (5th Cir. 1971), with McGuire v. United States, an unreported case ( N.D. Cal. 1970, 25 AFTR2d 1127, 70-1 USTC par. 9384), we would still face the problem of defining what constitutes "gain." Compare Conner v. United States, supra, with McCabe v. Commissioner, 54 T.C. 1745, 1748 (1970). It is in situations like this that one can truly admire the wisdom of Mr. Justice Holmes, in particular, as he expressed in United States v. Kirby Lumber Co., 284 U.S. 1 (1931), "We see nothing to be gained by the discussion of judicial definitions." n4

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -


n4 That petitioners place too much reliance upon the words used to define income in Eisner v. Macomber, 252 U.S. 189, 207 (1920), is aptly demonstrated by Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), where, at page 431, the Court rejected those words as "a touchstone to all future gross income questions."


- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**9]

Nevertheless, accepting the conclusion that some kind of "gain" must be realized for there to be income, the flaw in petitioners' analogy of what they call the "cost of doing labor" to the "cost of goods sold" concept -- essentially its failure to acknowledge the difference between people and property -- may be shown. The "cost of goods sold" concept embraces expenditures necessary to acquire, construct or extract a physical product which is to be sold; the seller can have no gain until he recovers the economic investment that he has made directly in the actual item sold. See Estate of Johnson v. Commissioner, 42 T.C. 441, 444-445 (1964), affd. per order 355 F.2d 931 (6th Cir. 1965), and cases cited thereat. Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property, and whether the distinction comports with petitioners' philosophical rationalization for their argument, it is recognized for Federal income tax purposes. See Hahn v. Commissioner, 30 T.C. 195 (1958), affd. per curiam 271 F.2d 739 (5th Cir. 1959). One's gain, ergo his "income," from the sale of his labor is the entire amount received therefor without any reduction for what he spends to satisfy his human needs.

Without constitutional backing for their position concerning the definition of income, petitioners are left with a bald assertion that section 262 is unconstitutional. However, it has long been established that "Congress has power to condition, limit, or deny deductions from gross income in order to arrive at the net that it chooses to tax." Helvering v. Independent Life Ins. Co., 292 U.S. 371, 381 (1934). And, as the Supreme Court has also stated:

"For income tax purposes Congress has seen fit to regard an individual as having two personalities: "one is [as] a seeker after profit who can deduct the expenses incurred in that search; the other is [as] a creature satisfying his needs as a human and those of his family but who cannot deduct such consumption and related expenditures." [Fn. ref. omitted.]

United States v. Gilmore, 372 U.S. 39, 44 (1963). This Court has no power to enlarge the deductions for personal exemptions authorized by section 151 to comport with petitioners' actual living expenses. Crowe v. Commissioner, 396 F.2d 766 (8th Cir. 1968). Reading v. CIR, 70 T.C. 730, 732-734 (1978)

And what did one our founding fathers think about taxing a working person’s wage?

Here's another Jefferson quote to ponder:

I approved, from the first moment, of the great mass of what is in the new Constitution: the consolidation of the government; the organization into executive, legislative, and judiciary; the subdivision of the legislative; the happy compromise of interests between the great and little states by the different manner of voting in the different houses; the voting by persons instead of states; the qualified negative on laws given to the executive, which, however, I should have like better if associated with the judiciary also, as in New York; and the power of taxation. I thought at first that the latter might have been limited. A little reflection soon convinced me it ought not to be. Letter to Francis Hopkinson, March 13, 1789.

The Supreme Court has made it clear on numerous occasions that wages are income:

[T]he earnings of the human brain and hand when unaided by capital ... are commonly dealt with as income in legislation. Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913).

There is no doubt that the statute could tax salaries to those who earned them...Lucas v. Earl, 281 U.S. 111, 114 (1930).

[The tax code] is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected. C.I.R. v. Smith, 324 U.S. 177 (1945).

Wages usually are income ... Central Illinois Public Serv. Co. v. United States, 435 U.S. 21, 25 (1978).

[T]he premise that personal injury awards cannot involve gain is obviously false, since they often are intended in significant part to compensate for the loss of gain, e. g., lost wages. (Citation omitted.) Since the gain would have been income, surely at least that part of a personal injury award that replaces it must also be income. Lukhard v. Reed, 481 U.S. 368, 375 (1987), (plurality opinion of Justice Scalia, joined by Rehnquist, White, and Stevens, Blackmun concurring in the result; footnote omitted).

The definition of gross income under the Internal Revenue Code sweeps broadly. Section 61(a), 26 U.S.C. 61(a), provides that ‘gross income means all income from whatever source derived,’ subject only to the exclusions specifically enumerated elsewhere in the Code. As this Court has recognized, Congress intended, through 61(a) and its statutory precursors, to exert ‘the full measure of its taxing power,’ [citation omitted] and to bring within the definition of income any ‘accessio[n] to wealth.’ [citation omitted] There is no dispute that the settlement awards in this case [for ‘back wages’ to compensate for sex discrimination] would constitute gross income within the reach of 61(a). United States v. Burke, 504 U.S. 229, 233 (1992). Later in the same opinion, the Supreme Court referred to the compensation received by the taxpayers as “the wages properly due them - wages that, if paid in the ordinary course, would have been fully taxable.” 504 U.S. at 241.

It [I.R.C. section 104, relating to compensation for personal injuries] also excludes from taxation those damages that substitute, say, for lost wages, which would have been taxed had the victim earned them. O’Gilvie v. United States, 519 U.S. 79 (1996).

Even if we suppose that strike benefits are made to compensate in a sense for the loss of wages, the principle of payments in compensation does not apply because the thing compensated for, the wages, had they been received, would have been included in gross income. United States v. Kaiser, 363 U.S. 299, 311 (1960).

It was therefore error to instruct the jury to disregard evidence of Cheek’ s understanding that, within the meaning of the tax laws, he was not a person required to file a return or to pay income taxes and that wages are not taxable income, as incredible as such misunderstandings of and beliefs about the law might be. Cheek v. United States, 498 U.S. 192, 204 (1991), (emphasis added)

....it is incomprehensible to me how, in this day, more than 70 years after the institution of our present federal income tax system with the passage of the Revenue Act of 1913, 38 Stat. 166, any taxpayer of competent mentality can assert as his defense to charges of statutory willfulness the proposition that the wage he receives for his labor is not income, irrespective of a cult that says otherwise and advises the gullible to resist income tax collections. (Justice Blackmun, dissenting in Cheek, 498 U.S. at 209. It should be noted that both the majority and the dissenters in Cheek agreed that Cheek's argument that his wages weren't income was preposterous; they just differed on whether his alleged sincere belief that they weren't negated the element of willfullness).

 

[johnwk]

Originally Posted by johnwk

In reference to the definition of “income” I rely upon the sound reasoning stated in In EISNER v. MACOMBER , 252 U.S. 189 (1920) the SCOTUS gave the characteristics defining “income”

SCOTUS has confined Macomber to its facts and has declined to use it as a litmus test for determining what income is:

So now, instead of providing sound reasoning as to the definition of "income" for tax purposes, you decide to offer opinions which have nothing to do with sound reasoning to determine the meaning of "income".

Flooding your post with irrelevant material does not help your absurd position. It merely shows you cannot support your opinion with sound reasoning.

JWK

 

[oyarde]

They can start by slashing spending .

 

[erowe1]

I'm having trouble following this thread. It looks like it's a debate about which kinds of taxes conform to various make-believe laws that people made up and that judges gave make-believe rulings about.

Is there more to it than that?

 

[Sonny Tufts]

So now, instead of providing sound reasoning as to the definition of "income" for tax purposes, you decide to offer opinions which have nothing to do with sound reasoning to determine the meaning of "income".

Flooding your post with irrelevant material does not help your absurd position. It merely shows you cannot support your opinion with sound reasoning.

It's obvious that in your world, "sound reasoning" is confined to anything that agrees with your preconceived ideas. Your problem, of course, is that you cannot find a single instance in which any court in the history of the country has held that wages aren't income for federal tax purposes, and you cannot distinguish the countless cases that uniformly and without exception hold to the contrary.

Look, SCOTUS gave a definition of income in the Glenshaw Glass case, in which it characterized income as an accession to wealth, clearly realized, over which one has control. This was much broader than the definition given by Macomber (gain derived from capital, labor, or both combined), which would not have covered the punitive damages that were at issue in the Glenshaw case. It should be obvious that wages meet the Glenshaw definition, but even if they didn't Congress can still impose an excise on the receipt of pay-for work.

 

[ZENemy]

I'm having trouble following this thread. It looks like it's a debate about which kinds of taxes conform to various make-believe laws that people made up and that judges gave make-believe rulings about.

Is there more to it than that?

Anything as complicated as this thread should not be legal.

 

[Sonny Tufts]

I'm having trouble following this thread. It looks like it's a debate about which kinds of taxes conform to various make-believe laws that people made up and that judges gave make-believe rulings about.

Is there more to it than that?

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

 

[erowe1]

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

If the issue is the consequences, then all the debates about what the laws really mean are irrelevant. All that matters, and that isn't just make believe, is how these supposed laws are actually enforced in the real world. Whether this enforcement is in conformity with whatever the laws some human beings made up really mean and whatever opinions about them judges made up about is moot.

 

[ZENemy]

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

LOL

ALL laws are "make believe". Court Rulings and laws are opinions backed by idiots that claim control over their fellow man and are willing to KILL those that do not agree.

It was someones opinion that it was OK to have slaves.
Its someones opinion that its OK to obliterate brown children the world over.
It is also someones opinion that the US government can take peoples money, it just happens to have the biggest guns possible to aim at those that disagree.

 

[johnwk]

It's obvious that in your world, "sound reasoning" is confined to anything that agrees with your preconceived ideas. Your problem, of course, is that you cannot find a single instance in which any court in the history of the country has held that wages aren't income for federal tax purposes, and you cannot distinguish the countless cases that uniformly and without exception hold to the contrary.

Once again you avoid sound reasoning to judge opinions of the court, especially a court which recently admitted in the Kelo case it was changing the meaning of public use as it was understood by our founders in order to allow folks in government to take private property and transfer it to another for a profit making business venture, asserted to be a" public purpose", and justifying such tyranny because of the “evolving needs of society”!

I take it you do not even read and analyze what you post. Part of one of the opinions you offered from the court stated:

Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property …

Really? Seems to me our Supreme Court, using sound reasoning previously articulated that:

"The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property."___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

The very reason for slavery when openly practiced in America was to take procession of the wealth created by property slaves had in their own labor.

Today the game is a bit different in that modern day slavery is carried out through forms of taxation, but with the same end result of confiscating the wealth produced by the property each working person has in their own labor.

In any event I am a big supporter of returning to our Constitution’s original tax plan which was based upon principles which to not change with the passage of time.

Keep in mind that if our Constitution’s original tax plan were in effect, Congress would be forced to finance its functions from imposts, duties, and excise taxes on specifically selected articles of consumption, preferably articles of luxury. Raising revenue as described above limits Congress’ revenue to taxes on consumption. Hamilton, in Federalist No. 21 points out with regard to taxes on consumption,

“There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counter balanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.


It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”

Let us say for conversation purposes that Congress is only allowed to raise its revenue by selecting specific articles of luxury and placing a specific amount of tax on each article selected. The flow of revenue into the federal treasury under such an idea would of course be determined by the economic productivity of the nation. If the economy is healthy and thriving and employment is at a peak, the purchase of articles of luxury will be greater than if the economy is stagnant and depressed. And thus, Congress is encouraged to adopt policies favorable to a healthy and vibrant economy because the flow of revenue into the federal treasury can be disrupted should Congress adopt oppressive regulations which impeded and burden our founder’s intended free market system.


And so, if Congress is limited to raising its revenue by taxing specifically selected articles of luxury, it suddenly becomes in Congress’ best interest to work toward a healthy and vibrant economy which in turn produces a productive flow of revenue into the federal treasury! It should also be noted that taxing any specific article too high, will reduce the volume of its sales and diminish the flow of revenue into the national treasury, and thus, taxing in this manner allows the market place to determine the allowable amount of tax on each article selected as Hamilton indicates above.


Some may claim that if Congress is required to select each specific article for taxation and place a specific amount of tax on each article, such a system would invite abuse and allow Congress to exercise favoritism with impunity and would certainly pander to countless lobbyists looking for an advantage in the selection of taxable articles. But let us take a closer look at the consequences involved if Congress should attempt to abuse this power. If Congress should abuse the system and tax one article while excluding another for political gain, consumers are treated to a tax free article and Congress reduces its own flow of revenue into the national treasury. In addition, for every penny lost by excluding a lobbyist’s particular article from taxation, another article’s tax will have to be increased to reclaim that penny. And with each increase upon any specific article the reality of diminished sales becomes a very sobering factor for Congress to deal with as explained by Hamilton in Federalist No. 21.


Finally, under our Constitution’s original tax plan, let us remember that if Congress does not raise sufficient revenue from imposts, duties and miscellaneous excise taxes on specifically chosen article of consumption and spends more than is brought in which creates a deficit, it is at this time that the apportioned tax is to be used to extinguish the deficit created, and each state’s congressional delegation must return home with a bill in hand for its state’s apportioned share of this tax and place this burden upon their Governor and State Legislature, and would deplete their own state’s treasury.


The bottom line is, what do you think would happen if New York State’s big spending Congressional Delegation had to return home with a bill for New York to pay an apportioned share to extinguish the 2013 federal deficit? I kind of think tea parties would change to tar and feather parties and big spenders in Congress would REAP THEIR JUST REWARDS for their irresponsible and tyrannical spending.

Why is it that not one of our “conservative” media personalities [Rush Limbaugh, Sean Hannity, Glenn Beck, Laura Ingraham, Schnitt, Mark Levin, Dennis Prager, Bill O'rielly, Mike Gallagher, Doc Thompson, Lee Rodgers, Neal Boortz, Mike Huckabee, Tammy Bruce, Monica Crowley, Herman Cain, etc.] will discuss the wisdom of our Constitution’s original tax plan, especially when it paved the way to not only control Congress, but created the economic underpinning which led to America becoming the economic marvel of the world?


JWK


"To lay with one hand the power of the government on the property of the citizen [a working person’s earned wage] and with the other to bestow upon favored individuals, to aid private enterprises and build up private fortunes [Obama’s Solyndra, Chevy Volt, Fisker, Exelon swindling deals], is none the less a robbery because it is done under forms of law and called taxation."____ Savings and Loan Assc. v. Topeka,(1875).